Retailers Achieve 97% Holiday Order Fulfillment

The majority of retailers were able to keep their shipping promises this season as 97% successfully processed and delivered orders on their last guaranteed shipping date before Christmas, according to Kurt Salmon’s annual holiday shipping study. This was up from 95% in 2015 and 87% in 2014.

However 20% of retailers surveyed moved their cutoff back a day compared to last year – most often from Dec. 21 to Dec. 20, or Dec. 20 to Dec. 19 – or dropped guaranteed delivery promises due to last-minute weather and capacity concerns, Kurt Salmon found. But the overall high success rate proved the conservative approach allowed retailers and carriers to meet their obligations in a tough environment.

In fact, the average shipping cutoff date went from Dec. 21 in 2015 to Dec. 20 this past season, Kurt Salmon found.

The Kurt Salmon study was based on orders placed by analysts at 32 retailers across a broad range of categories, including traditional big-box stores, specialty firms and pure-play ecommerce companies.

Steve Osburn, managing director at Kurt Salmon, said many retailers also managed expectations and dealt with peak order flow by removing “order now and receive by Christmas” verbiage from their websites on the cutoff date itself.

“Retailers want to make sure they’re delivering against the promise, and this practice was part of their way to curb volume,” Osburn said. “If that take out that message it might dissuade some people from placing last-minute ecommerce orders that could overload the system.”

Kurt Salmon also found a lot more companies upping their omnichannel game, especially buy online, pickup in store (BOPIS), cutting down on fulfillment costs while also offering a convenient option for many customers. Some retailers allowed customers to place orders for store pickup as late as 6 p.m. on Christmas Eve.

“Many of them adjusted their website messages to play up the fact that the BOPIS option was available 24 hours ahead of Christmas,” Osburn said. “For those retailers that implemented omnichannel earlier, they were able to deliver a little better service to customers with less risk (of late deliveries). Those that hadn’t enabled all the omnichannel fulfillment methods were the ones that paid a price.”

Kurt Salmon found the top three retailers in terms of holiday order fulfillment were again all luxury brands. Saks Fifth Avenue let customers place their last orders with guaranteed Christmas delivery on Dec. 23, while Coach and Nordstrom had a Dec. 22 cutoff for standard shipping. None of them charged for shipping.

Osburn said this was not surprising as luxury brands generally having a higher tolerance for eating shipping costs and still making margins on higher-ticket items, and are less promotion-driven than mid-market stores, which leads to greater last-minute order volumes.

“They also have a customer that demands a premium service,” he said. “Some of the higher-end luxury brands have been doing direct-to-customer fulfillment for 20 years, even if that used to be someone taking the dress, jumping in their car and driving it to them. So they have a lot of experience delivering against those high expectations.”

Leave a Reply

Your email address will not be published. Required fields are marked *